In a flurry of Inauguration Day actions to promote his “drill, baby, drill” agenda, President Trump issued an executive order declaring a “national energy emergency.” He also directed the  Department of Energy to restart reviews of permits for the export of liquefied natural gas (LNG) “as expeditiously as possible.”

“We have something that no other manufacturing nation will ever have: the largest amount of oil and gas of any country on earth,” Trump said during his inauguration speech.  “And we are going to use it…and export American energy all over the world.”

However, there is no factual basis for the declaration of an "energy emergency" because oil and gas production in the U.S. soared to record-breaking levels during the Biden Administration.

And Trump’s action on LNG will likely have little or no impact on the industry or the proposed construction of almost two dozen new export terminals in the U.S., because global market conditions will determine whether the projects are built, observers of the industry argue. Biden issued a temporary pause on LNG export permits a year ago, but that was overturned by a federal judge in July.  

“It’s meaningless… nothing more than political theater and optics,” said Tyson Slocum, Energy Program Director for Public Citizen, which has filed several challenges to LNG terminals. “Trump can say, ‘I am undoing the pause.’ But he cannot quickly approve those pending applications, because they are contested proceedings.”

Beyond just the natural gas sector, Trump also issued a barrage of orders on a wide range of energy-related issues that raised serious concerns among environmentalists. One order directs federal agencies to grant “emergency approvals” for major energy projects.  A separate “unleashing American energy” order aims for “energy dominance through efficient permitting” and directs agencies “to expedite and simplify the permitting process” for pipeline and other energy projects by weakening the regulations implementing the National Environmental Policy Act (NEPA).  

Other Inauguration Day statements promised to pull the U.S. out of the Paris climate agreement, end subsidies for electric cars, and terminate climate-related programs, including by eliminating any consideration of the social cost of carbon from any federal permitting and regulatory decisions.

The potential impact of many of these orders remains unclear because an executive order does not modify the laws passed by Congress. Some of the actions require the formal proposal of regulations, which environmental groups and Democratic states are likely to challenge in court.  Other Trump executive orders directly contradict his claim that there is an "energy emergency," including walking back approvals for wind energy projects and loosening efficiency standards for appliances and vehicles.

Moneen Nasmith, a senior attorney at Earthjustice, noted that the agency that must approve LNG terminal construction, the Federal Energy Regulatory Commission (FERC), is an independent agency.

Beyond the questions about the legal impact of the executive orders, however, Nasmith said the concept behind them is a terrible idea. “I think there is an incredibly huge safety concern about anyone who wants to fast-track the approval of a massive industrial facility that deals with explosive, dangerous materials. If done poorly, it would have catastrophic effects,” Nasmith said.

LNG is explosive because it is methane that is extracted, usually by hydraulic fracturing in shale rock formations, and then supercooled into a condensed form. Companies condense it into a liquid so that it can be more easily shipped, often on tankers to overseas markets in Europe and Asia. U.S. exports of LNG have multiplied over the last eight years, in part because of the rise of fracking and in part because Russia’s 2022 invasion of Ukraine, which reduced Russia’s pipeline exports of natural gas to Europe.

Buoyed by the fracking boom, eight LNG export terminals have been built in the U.S., four in Louisiana, two in Texas, one in Maryland, and one in Georgia. Three new LNG terminals are now under construction, and 20 new terminals and five expansion projects are planned but not yet built, many of them along the Gulf Coast, according to the Oil & Gas Watch database and the U.S. Energy Information Administration.

If all these projects are built, they are expected to produce at least 80 million tons of greenhouse gases per year. That’s the equivalent of 20 coal-fired power plants or 16 million cars and trucks driven for a year. That much greenhouse gas pollution is expected to contribute to over 16,000 climate related deaths and nearly $14 billion dollars in climate related damage, according to Oil & Gas Watch’s compilation of EPA's Greenhouse Gas Equivalencies Calculator, the social cost of carbon, and mortality cost of carbon. And all those emissions are just from the LNG terminals themselves, not the upstream emissions from drilling, processing, or transporting gas or the downstream burning of natural gas – and do not include other health-damaging air pollutants from LNG terminals.

A December report from the U.S. Department of Energy warned that the unrestricted growth of LNG exports from the U.S. would also raise American energy bills by boosting the price of natural gas domestically, including for families and businesses.

“Any way you cut it, LNG exports increase greenhouse gas emissions and cut against our national and international carbon emission goals, period,” said Megan Gibson, Senior Attorney at the Southern Environmental Law Center. “And that is layered on top of the adverse impacts on the economy and the local communities. These decisions should not be balanced in favor of industrial outputs at the expense of domestic consumers, the environment, and the future.”

The natural gas industry is hoping that Trump’s election will bring a financial windfall by encouraging more investment in LNG export facilities and gas pipelines across the country.

The S&P stock market index “expects LNG export capacity to double over the next five years and that future export activity is anticipated to generate more than $2.5 trillion in total revenues for US business,” which will likely go to only a handful of big companies.

However, some market analysts caution that many more LNG export terminals are being proposed for construction than the market will bear, and global economic and political conditions may shift and mean the end many of these proposed projects.

“Right now there are a crazy number of LNG export terminals under construction,” said Anne-Sophie Corbeau, an LNG expert at the Columbia University School of International Public Affairs Center on Global Energy Policy. “There is a legitimate question about where all this gas is going to go, before we even start talking about additional LNG exports. But that’s not a message that people in the U.S. want to hear.”

Moreover, some analysts predict that demand for natural gas in key markets – namely European countries – is expected to decline by 29 percent by 2030, and 67 percent by 2040, according to a report by Zero Carbon Analytics. “As a result of this declining demand, the EU could soon be facing a gas surplus,” the report said.

Ira Joseph, senior research associate and expert on LNG at the Center for Energy Policy, said that President Biden’s announced “pause” in January 2024 of LNG export approvals slowed down only a small number of projects – and only briefly.  A judge overturned the “pause” in July.

The only projects that were potentially slowed were four terminals, all based in Louisiana, that would export natural gas to countries with which the U.S. does not have free-trade agreements. These were Venture Global’s Calcasieu Pass 2 (CP2), Delfin LNG, Lake Charles LNG, and Commonwealth LNG.

“The industry was treating it like the sky was falling -- but the sky wasn’t necessary falling,” Joseph said. “There was nobody saying you couldn’t build an LNG project anymore – that wasn’t the point.”

All LNG terminals proposing to export natural gas to countries with which the U.S. does not have a free-trade agreement – like China – must obtain authorization from the U.S. Department of Energy certifying that exporting gas will be in the public interest. Public Citizen and environmental groups have challenged this, based in part on the expected rate increases to American consumers of natural gas documented by the Department of Energy.

In this context, Trump’s lifting of the Biden “pause” is of little importance, said Joseph.

However, Joseph said that if Trump somehow brings an end to the Russian war in Ukraine – another Trump campaign pledge -- that could undermine the financial viability of many of the proposed LNG export terminals in the U.S. This is because the expected profitability of these U.S. gas exports to Europe were predicated in part on the war reducing Russian natural gas exports to Europe.

“The Russian invasion of Ukraine definitely helped greenlight a lot more U.S. LNG capacity to go forward than would have before that,” Joseph said.

In that context, Joseph suggested, what the Trump Administration does with Russia and Ukraine could have a major impact on the LNG industry. On Wednesday, Trump threatened Russia with “tariffs, taxes and sanctions” if President Vladimir Putin didn’t make a “deal” to end the war in Ukraine.

If the war were to end and Russian gas were to then flood the market in Europe, it could convince investors to pull the plug on the construction of LNG export terminals in the U.S., Joseph said.

.......................................................................................................................

Lead photo: "Norman Lady" filled with liquefied natural gas docks at the Dominion Natural Gas Plant's offshore docking facility in Cove Point, Md. Photo by the Associated Press.